Shang-Jin WeiSays More…

May 5, 2020

This week, Project Syndicate catches up with Shang-Jin Wei, a former chief economist at the Asian Development Bank.

Project Syndicate: Last August, you wrote that “paradoxically, a downturn in America could help to improve bilateral economic relations with China” – a prediction that, you noted, was grounded in recent history. And yet, now that a downturn has arrived, US President Donald Trump has arguably become even more antagonistic toward China, calling the COVID-19 coronavirus a “Chinese virus” and accusing the World Health Organization of promoting “Chinese disinformation” about the virus. Why is this downturn – a global crisis – so far not spurring bilateral cooperation? Do you see hope for a reversal?

Shang-Jin Wei: My statement last August is based on history: in the past, when the United States has faced economic or social difficulties – such as after the terrorist attacks of September, 11, 2001, and the 2008 global financial crisis – its appetite for international cooperation has tended to rise.

Officials recognized that international coordination and cooperation can go a long way in supporting national recovery policies. That is why more than 90 US foreign-policy experts, including former high-ranking White House officials from Republican and Democratic administrations, recently issued a joint statement urging Trump to work with China to address the COVID-19 pandemic.

It is true, however, that since the 1990s, bilateral tensions have often risen in the runup to US elections, with political candidates from both parties competing over who is tougher on China. In the current election season, Trump has a particularly strong incentive to ratchet up the bilateral competition, in order to shift voters’ attention away from his administration’s failures in handling the pandemic. So we can expect more antagonism in the months ahead.

Wei recommends

by Kai-Fu Lee

In painting a picture of
what an artificial-intelligence-dominated world might look like, Lee both identifies reasons why China may take the lead and considers what it would take for the US to reclaim dominance.

From the PS Archive

From 2020

Wei rebuts common arguments against the use of face masks by the general public. Read more.

Shang-Jin Wei, a former chief economist at the Asian Development Bank, is Professor of Finance and Economics at Columbia Business School and Columbia University’s School of International and Public Affairs.

The World Trade Organization’s appellate body is under threat not from China, but from the United States, which is blocking the appointment of new judges to the panel. Reviving the WTO will require changes to the organization's rules – but killing its dispute-settlement system is not the solution.

The World Trade Organization’s appellate body is under threat not from China, but from the United States, which is blocking the appointment of new judges to the panel. Reviving the WTO will require changes to the organization's rules – but killing its dispute-settlement system is not the solution.

Quite valid, and that reality is often ignored. Today I happened to read some comments by Jim Reid from DB about the US and China. Of course this is a political tangent from his excellent economic report, however, it's not his politics, it is just a bit of typical global politics of today.

"Meanwhile, the US Senate passed a legislation yesterday that would pave the way for targeted sanctions against government officials in China over alleged human rights abuses against Muslim ethnic minority groups in the country’s northwest. The legislation directs the White House to submit a report to Congress within 180 days identifying those deemed responsible for torture, extrajudicial detention, forced disappearance and other “flagrant denial(s)” of human rights in China’s Xinjiang Uygur Autonomous Region."

There have been attacks on Chinese citizens by Muslim ethnic minority groups. The Muslims are more cruel not only to their own passport confiscated workers in Saudi Arabia, but even some of their so-called political elite. The POTUS has treated South American illegal migrants in similar fashion probably as the Chinese internment facilities. Not that two or a half-dozen wrongs ever make one right, however, who's throwing daggers for what. whom, and why? The real issues are respect of laws and citizens. Reasonable behavior is not an unreasonable expectation. Turkish leadership has effectively been conditioning and training all Muslims in Europe to overthrow any and all reasonable government process in the EU. That is not normal. It is not normal for the French police to not perform reasonable care to be able to respect French law in certain neighborhoods. This is bad. China has every right to train and educate people to perform within certain reasonable behavior. If certain people can't get it, then the going gets rough. It is no where as rough as being thrown into any of the incarceration or confinement facilities anywhere in the Muslim controlled nations. Many of these states are extremely wealthy. They are NOT developing nations. They are just corrupt states. China works to control corruption on all levels. It is not an easy task. The Chinese population is practically the largest of any nation. The US has unfortunately forgotten what book to really follow. It remains to be seen if China has forgotten or not. So far, it really does not look like it. Even the reports at the worst level on Yahoo are not that extreme compared to Muslim actions against all other states in the world, including their own. Who is really exhibiting the "flagrant" denial of human rights globally?

Present grand-standing by POTUS is laughable. He and his family have so many trademarks assigned for goods to be produced in China. There is no way this man is going to prevent or cause any havoc to any pricing effects for his shipments. Now, perhaps there will be specially written exceptions that China will exempt certain goods and companies. And guess whose goods and companies will be on that exempt list. The first three guesses don't count. You get it right the first time, or you don't get it at all.

Until Covid-19 I was basically agnostic toward whether the US and China could and should even more deeply integrate their economies. However since Covid 19 has shown that Xi and his cohorts care more about saving face than protecting the world from a disease that their own practices caused either in not closing wet markets after SARS showed the world the danger or through an inadvertent escape from their Wuhan lab.

Instead EVERY action they took, has been either to save face or with callous disregard to the deaths that they have caused around the world.

Look at the list, 1) keeping out the US CDC from sending observers and refusing offers to help China 2) keeping the WHO advisors out for crucial weeks from Wuhan and Hubei , 3) silencing ruthlessly the 8 Wuhan doctors that tried to alert colleagues and foreigners of human to human transmissions, 4) "disappearing" journalists, lawyers and even a chinese billionaire that were reporting the actual epidemic, 5) forbidding publications stating the extent of the epidemic,6) ordering the destruction of the first genome rather than sharing it with the WHO or the US CDC, 6) denying to the world (and if Der Spiegel is correct forcing their puppet at the WHO to deny human to human transmission), 7) having the gall to having their propaganda flacks try to blame the US for starting this disease and finally 8) even threatening other countries with sanctions including even in Xin Hua stating that "if the US kept saying that it was a Chinese virus they would deny antibiotics and allow the USA to drown in a sea of Corona"

I am sorry but this speaks of a power that doesn't fulfill its basic international responsibilities and in practice could care less if it destroyed the lives of millions almost to the point where thinking people in the rest of the world are left wondering did Xi and his coteries WANT the spread of Covid-19 beyond China so that it would effect the USA and Europe very badly knowing that their societies could not be locked down as easily as in a dictatorship, and so that it would no longer be seen by their own people as a Chinese virus.

That being the case, at least for the forseeable future I think the US, Japanese, and European companies are likely to disinvest in China to the extent practicable either on their own volition or under their respective governments' edicts. I certainly can not stomach the USA ever being dependent on China again for any critical supplies.

By the way I say the foregoing with deep regret. All my academic and working career I have supported globalization and enhanced trade and cultural exchanges. However for the first time, even more so than with the Soviet Union I sense a nearly malevolent force that is so convinced that China "Deserves" to rule the world that treaties and customary standards of behavior are irrelevant or just designed to constrain their enemies and that its current leader could care less over whom he hurts to get his dream of an ascendent China over all.

Free trade advocates seem to think that balancing trade is unnecessary. Never mind that every successful country in the last 75 years has either had fabulous natural resources or has had trade policies that break every rule of free trade book allowing them to profit at others expense. Then as soon as the looser gets upset retaliation becomes ridiculous _ 200 % duties - and economists defend the cheats.

"From COVID-19 medical research to climate-change mitigation, there are so many areas where the world needs the US and China to work together. One hopes that both societies and their political leaders find the courage and wisdom to do so."

A sober remark, and, in general, a very interesting interview.

I don't know enough about China to assess the possibility that such wisdom and courage will be apparent in that country, though it won't surprise me if there they do indeed become apparent. Where the US is concerned, it doesn't seem likely that Donald Trump will look for cooperation with China, in the human interest, instead of seeking to do what has so often been done by high politicians in the past: encourage antagonism toward another power, hence also a simple patriotism at home, in the interests of holding onto personal power. I ask myself how it can have happened that the Americans should install such a man in the White House.

The answer to your question is that the Americans are the most pragmatic and experimentally driven of all peoples.

So after decades of testing and comparing the promises made by the Globalist/Leftist-Liberal hypothesis, to the actual real physical and observable results delivered by the Globalist/Leftist-Liberal hypothesis, the American people determined that the Globalist/Leftist-Liberal hypothesis is a load of steaming hypothetical bullshit that has zero ability to usefully predict real world outcomes.

That this should be the result should realistically have been no surprise to anyone, as Globalism/Leftist-Liberalism is in one sense the wilful abandonment of the primacy of experimental results, reality in other words, in favor of elevating dogma to primacy. It doesn't matter what actually happens when you apply Globalism/Leftist-Liberalism, look what 'should' happen....

Further, Globalism/Leftist-Liberalism is in effect a diety free religion, which like all religions, tries to blame its abject failure to deliver on its promises to predict real world outcomes - on 'sin' and a 'devil'. In Globalism/Leftist-Liberalism:

Trump was elected because he is fundamentally and overwhelming a pragmatist.

That is Trump has demonstrated an ability to:

- exploit the real world predictive ability of various abstract models over the ranges and circumstances where they actually work

-, just as importantly, Trump has demonstrated an ability to dump abstract models that don't deliver any useful real world predictive ability, or that have stopped producing useful real world predictive ability

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Nicholas Agar
emphasizes the importance of unchosen social interactions, warns that technology cannot replace them, and wonders whether COVID-19 is enough of a shock to improve the lives of poor people in the long term.

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